Wan Hai Lines posts net profit following refocus

EYE ON ASIA:Given the sluggish demand both in the US and Europe, Wan Hai Lines’ focus on intra-regional routes and the Asian market helped it remain profitable

By Amy Su / Staff reporter

Wan Hai Lines Ltd (萬海航運) was the only listed container shipping company in Taiwan to post a net profit in the first quarter of this year on the back of its focus on regional routes in Asia, which showed steady growth in trade volume.

Wan Hai, the nation’s third-largest container shipping company in terms of fleet size, outperformed the sector by posting a net profit of NT$124.89 million (US$4.15 million), or NT$0.05 per share, in the first three months of the year, the company said in a filing to the stock exchange.

The first-quarter results were an improvement from a net loss of NT$393.06 million, or NT$0.18 per share, in the same period last year, statistics showed.

The company’s focus on the Asian market and shorter intra-regional routes were key factors in helping it maintain profitability in the first quarter, as trading momentum in the region was relatively stable compared with the US and Europe.

In addition, freight rates for intra-regional routes in Asia showed less volatility than long-haul routes.

The nation’s two other major shipping companies — both of which rely more on long-haul lines — recorded a loss in the first quarter.

Evergreen Marine Corp (長榮海運), the nation’s largest container shipping firm, reported consolidated losses of NT$1.84 billion in the first three months, or a loss of NT$0.53 per share, which represented an improvement from a net loss of NT$3.14 billion, or losses per share of NT$0.9, reported a year earlier, the company’s stock exchange filing data showed.

Yang Ming Marine Transport Corp (陽明海運), the nation’s second-biggest container shipper, also saw net losses of NT$2.68 billion, or N$0.82 per share, in the first three months, compared with a net loss of NT$4.97 billion, or NT$1.76 per share, the previous year.

Yang Ming chairman Frank Lu (盧峰海) said last month that the January-to-March period would be the low point for its business this year.

“We hope to make progress in terms of profitability this year from last year,” Lu told a media briefing, expressing optimism about both US and Asian routes this year.

However, Capital Securities Corp (群益證券) said that oversupply remains a major downside risk for the sector this year.

“Oversupply pressure may increase uncertainty about plans to raise freight rates in the coming month, the typical peak period for the sector,” the brokerage said in a research note.